Modest early gains for NZ shares

The New Zealand sharemarket gained modestly in early trading as top stock Telecom lifted 1.5 per cent, but a recent rally in Fletcher Building shares went into reverse.

Telecom shares were up 4c early to $2.75, while Fletcher Building was down 9c to $7.95, after having risen more than 50c in the past five trading days to a three-week intraday high of 807 yesterday.

The benchmark NZX-50 index is up 4.3 points to 3125.9, after easing 1.1 points yesterday.

Among shares rising early were Freightways, up 6c to $3.12, NZ Refining Co up 3c to $4.98, Fisher & Paykel Healthcare up 3c to $3.41, Tourism Holdings up 2c to 59 and Cavalier Corporation up 2c to $2.52.

Along with Fletcher Building, another leading stock, Contact Energy, was down early, losing 3c to $6.05.

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In the United States, stocks advanced on an uptick in corporate deal activity while the weak US dollar led to gains in commodities, lifting shares of oil and mining companies.

Kraft Foods, North America's biggest food company, said it was intent on pursuing Britain's Cadbury despite the confectionary company's rejection of a US$16.7 billion ($24.3b) Kraft bid made on Monday.

The Kraft bid comes after France Telecom and Deutsche Telekom announced plans to merge their British mobile units.

Last week, Walt Disney said it will buy Marvel Entertainment for US$4b, fuelling hopes of a pick-up in merger activity.

The Dow Jones industrial average closed up 0.6 per cent at 9497.34, the Standard & Poor's 500 Index rose 0.9 per cent at 1025.38, and the Nasdaq Composite Index gained 0.9 per cent at 2037.77.

- NZPA